Question 1

A Statement of Functional Expenses is required for government-owned hospitals.

Accepted Answer

A) True 
 B)False

Question 2

The FASB requires private not-for-profit organizations to report individual assets and liabilities separated by unrestricted,temporarily restricted and permanently restricted.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true of a Statement of Cash Flows for a private sector,private not-for-profit organization?

Accepted Answer

A)  Four categories are used: Operating, Capital Related Financing, Non-capital Related Financing, and Investing. 
B)  If the direct method is used, the not-for-profit must also present a reconciliation between total change in net assets and cash flows from operating activities. 
C)  Cash flows must be presented separately for Unrestricted, Temporarily Restricted, and Permanently Restricted categories. 
D)  None of the above; all are true.

Question 4

Which of the following is not an example of a donor imposed restriction?

Accepted Answer

A)  Funds are not to be used until the following year. 
B)  Funds must be used on certain programs. 
C)  Funds are to be endowed. 
D)  All of the above are examples of donor imposed restrictions.

Question 5

A donor gave $ 1,000,000 to a private not-for-profit organization to be held in endowment. In addition,the governing board permanently designated $ 500,000 to the endowment. In the Statement of Financial Position,how should these amounts be classified?

Accepted Answer

A)  Permanently Restricted: $1,500,000; Unrestricted: $ - 0 - 
B)  Permanently Restricted: $1,000,000; Unrestricted: $ 500,000 
C)  Permanently Restricted: $ 500,000; Unrestricted: $1,000,000 
D)  Permanently Restricted: $ - 0; Unrestricted: $1,500,000

Question 6

The FASB requires private not-for-profit organizations to report expenses separated by unrestricted,temporarily restricted and permanently restricted.

Accepted Answer

A) True 
 B)False

Question 7

A donor gave equipment valued at $60,000 at the beginning of 2015 to a private not-for-profit organization. The equipment had a 10-year life and depreciation of $6,000 was charged during 2015. At the end of the year,the net assets to be reported in unrestricted net assets related to this equipment would be:

Accepted Answer

A)  $60,000. 
B)  $54,000. 
C)  $ 0. 
D)  Either $54,000 or $0, depending upon the policy of the organization

Question 8

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted,according to the board's intentions.

Accepted Answer

A) True 
 B)False

Question 9

A conditional pledge should be recognized as revenue when the pledge is made.

Accepted Answer

A) True 
 B)False

Question 10

What are the revenue recognition requirements for:
(1)unconditional promises to give (i.e.pledges),
(2)conditional promises to give,
(3)multi-year pledges,
(4)donated services,and
(5)Donated materials or fixed assets.

Accepted Answer

The answer of What are the revenue recognition requirements for:
(1)unconditional...

Question 11

After the issuing of Statement 117,not-for-profit financial statements are relatively standardized across industries.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a distinguishing characteristic of a private not-for-profit organization according to FASB Statement No.116?

Accepted Answer

A)  Operating purposes other than to provide goods or services at a profit. 
B)  Absence of ownership interests like those of business enterprises. 
C)  Commonly financed through voluntary contributions. 
D)  Operate for the direct benefit of members.

Question 13

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.Care sold equipment for $30,000 which cost $40,000 and had a book value of $25,000 at the time of sale.In recording the sale,Care should:

Accepted Answer

A)  Record "temporarily restricted revenue" of $ 30,000. 
B)  Record a gain of $ 5,000. 
C)  Record a loss of $10,000. 
D)  None of the above.

Question 14

Which of the following is not true regarding accounting and financial reporting for nongovernmental,not-for-profit organizations?

Accepted Answer

A)  Expenses are classified as unrestricted or temporarily restricted. 
B)  Expenses must be reported by function, either in the Statements of Activities or in the notes. 
C)  Net assets are classified according to donor-imposed restrictions. 
D)  All of the above are true.

Question 15

Lisa informed her church that she had named the church in her will and later provided a written copy of the will to the church.At what point should the church record the contribution?

Accepted Answer

A)  At the time when the church was informed of her will. 
B)  At the time the church receives a written copy of the will. 
C)  At the date the probate court declares the will valid following her death. 
D)  At Lisa's death.

Question 16

Which of the following would not be an example of a voluntary health and welfare organization?

Accepted Answer

A)  A state community college. 
B)  A private mental health facility. 
C)  A senior citizen center. 
D)  A food bank.

Question 17

Answer the following questions regarding financial reporting by private not-for-profit organizations.
(1)What are the financial statements required for all private not-for-profit organizations?
(2)What organizations are required to present a Statement of Functional Expenses?
(3)What are the three classes of Net Assets?

Accepted Answer

The answer of Answer the following questions regarding financial reporting...

Question 18

Performing arts organizations are an example of other private not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 19

With respect to the Statement of Cash Flows for a private not-for-profit organization,donor restricted cash that must be used for long term purposes is classified as cash flows from financing activities.

Accepted Answer

A) True 
 B)False

Question 20

In 2015,a major drug company agreed to give a not-for-profit private college $300,000 to perform testing of a new drug. An advance payment of $200,000 was received in 2015. The college was to receive $1,500 per individual test. In 2015,the college completed 100 tests. How much revenue should the college report for 2015?

Accepted Answer

A)  $ 300,000 
B)  $ 200,000 
C)  $ 150,000 
D)  $ 100,000

Exam 10: Accounting for Private Not-For-Profit Organizations

A Statement of Functional Expenses is required for government-owned hospitals.

The FASB requires private not-for-profit organizations to report individual assets and liabilities separated by unrestricted,temporarily restricted and permanently restricted.

Which of the following is true of a Statement of Cash Flows for a private sector,private not-for-profit organization?

Which of the following is not an example of a donor imposed restriction?

A donor gave $ 1,000,000 to a private not-for-profit organization to be held in endowment. In addition,the governing board permanently designated $ 500,000 to the endowment. In the Statement of Financial Position,how should these amounts be classified?

The FASB requires private not-for-profit organizations to report expenses separated by unrestricted,temporarily restricted and permanently restricted.

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted,according to the board's intentions.

A conditional pledge should be recognized as revenue when the pledge is made.

What are the revenue recognition requirements for: (1)unconditional promises to give (i.e.pledges), (2)conditional promises to give, (3)multi-year pledges, (4)donated services,and (5)Donated materials or fixed assets.

After the issuing of Statement 117,not-for-profit financial statements are relatively standardized across industries.

Which of the following is not a distinguishing characteristic of a private not-for-profit organization according to FASB Statement No.116?

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.Care sold equipment for $30,000 which cost $40,000 and had a book value of $25,000 at the time of sale.In recording the sale,Care should:

Which of the following is not true regarding accounting and financial reporting for nongovernmental,not-for-profit organizations?

Lisa informed her church that she had named the church in her will and later provided a written copy of the will to the church.At what point should the church record the contribution?

Which of the following would not be an example of a voluntary health and welfare organization?

Performing arts organizations are an example of other private not-for-profit organizations.

With respect to the Statement of Cash Flows for a private not-for-profit organization,donor restricted cash that must be used for long term purposes is classified as cash flows from financing activities.